Southwest Airlines case analysis

Comments (0)

Transcript of Southwest Airlines case analysis

Tyler, Ashlee, Carley, and Justin Southwest Airlines: Case Analysis A Quick Look... Southwest's Mission "The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit." Feeling Nostalgic... Strategy is Everything Success Drivers Success Drivers, cont. “Hire Great people, and treat ‘em like family.” -Management by Walking Around

“Care for our Customers warmly and personally, like they’re guests in our home.”

“Keep fares and operating costs lower than anybody else by being safe, efficient, and operationally excellent.”

“Stay prepared for bad times with a strong balance sheet, lots of cash, and a stout fuel hedge.” Kelly’s Keys to Success Founded in 1967Rollin King and Herb Kelleher

Fought numerous legal battles from 1967 to 1972

Established Southwest's "Combative Can-Do Culture" Leading low-cost carrier in the United States

46,048 employees

Headquartered in Dallas, Texas -Be the best place to work.-Be the safest, most efficient, and most reliable airline in the world.-Offer customers a convenient flight schedule with lots of flights to lots of places they want to go.-Offer customers the best overall travel experience.-Do all of these things in a way that maintains a low cost structure and the ability to offer low fares. Gary Kelly's strategic objectives Good customer serviceGood attitudesQuirky, fun-loving employeesSeek out people who are a “good fit”

Route planningNo “hub-and-spoke” route systemsCities 150 to 700 miles apartNonstop flightsMost flights last no longer than 90 minutes- very few are longerNo service at airports where there would be less than 8 flights a day originating there Only one model of aircraft used- Boeing 737Boeing’s launch customer

Booking only through company websiteAvoid fees of travel agenciesReduce staffing at reservation centers

Morris Air Corporation- December 31, 19933.6 million shares of common stockHas been called “one of the smartest airline moves ever” Southwest’s Acquisitions AirTranFounded in 1992 as ValuJet1996- safety investigation started due to plane crash in Florida Everglades, crash kills all 110 passengers

Closed the deal May 2, 2011

Valued at $3.4 billion when including AirTran's leases and debt Acquisition of AirTran Strategic Advantages of acquiring AirTran Extended Southwest Network into new key marketsIncluding Atlanta and Washington D.C.

February 12, 2012- began service to Hartsfield-Jackson Atlanta InternationalGained 2 million more customers per yearPut Southwest in direct competition with Delta Does the AirTran Acquisition make good strategic sense? YES:AirTran and Southwest both emphasize on outstanding customer service

Enabled Southwest to work its way into New York LaGuardia and Ronald Reagan Washington National What this means for Employees Job Security

Better compensation and benefits

Enable them to grow the AirTran route system

Combined, over 43,000 employees Other Implications Southwest customers now have the option for international travelMexico, The Carribean, Aruba, The Bahamas, Bermuda, The Dominican Republic, Jamaica, Puerto Rico, other parts of Central America, and South America

Goal: Complete integration of the two airlines by 2014

Merger will make Southwest the nation's 4th largest airline According to Southwest, culture is defined as the development, improvement, and refinement of the originality, individuality, identity, and personality of a given people. Key Aspects of Southwest’s Culture Employees come first in Southwest's Culture. The company promotes a happy work environment through company-wide events and parties. The company supports their employees and agrees that they are the companies greatest assets. Happy Employees = Happy Customers Work HardDesire to be the best in the industryBe courageousDisplay a sense of urgencyPersevereInnovate The Warrior Spirit Follow the Golden RuleAdhere to the Basic PrinciplesTreat others with respectPut others firstBe egalitarianDemonstrate proactive in Customer ServiceEmbrace the SWA Family A Servant’s Heart Have FUNDon’t take yourself too seriouslyMaintain perspective and balanceCelebrate successesEnjoy your workBe a passionate team player The Fun-LUVing Attitude Weaknesses/Threats for Southwest Fuel prices are a constant threat